A Canterbury company that helps farmers trade their water permits is concerned the regional council is about to ban the activity.
Hydrotrader says the trading of unused water between farmers is at risk under a new council policy which comes into effect later this year.
Managing director Dr Anthony Davoren says about 6500 permits are in use.
The permits allow users to take water from the region's rivers and waterways.
His company, the only one of its kind in Canterbury, helps about 25 farms a year to trade their unused water with those who need more.
He says while that's a small amount, a blanket ban on the activity in Canterbury could affect trading in the rest of the country, which he says would stall the productive sector.
The Canterbury Regional Council says some catchments and ground water zones have been over-allocated and a number of options are being considered to remedy that.
However, it says no decisions have been made on water permit trading and consultation with stakeholders and the public will continue until June.
